The Politics of the Cooperative Sector in Developing Countries: Insights from Argentina, Brazil and Colombia

Summary :

Although cooperatives are widely recognized as key drivers of economic and social development, the type and scope of the policies aimed at promoting the formation, expansion and consolidation of this form of social business vary considerably across the developing world. Even in countries with a long tradition of cooperative entrepreneurship, government policies toward the cooperative sector differ considerably.

The question that naturally arises is: What accounts for such divergences? The broad political economy literature on policy decision making and policy processes suggests at least two possible explanations. On the one hand, advocates of the so-called “politics matters” school of thought contend that policy outputs are influenced by partisan variables. According to the traditional Left-Right characterization of the political spectrum, Leftist incumbents are driven by ideals and concerned with equality and progress, whereas Right-wing governments are mainly motivated by interests and tend toward inequality and conservatism (Bobbio 1997). On the other hand, promoters of the economic theory of regulation argue that political and regulatory outcomes are the result of complex interactions between the supply of government-bestowed benefits and the demand for those benefits by consumers and firms (Stigler 1971). From this perspective, the degree of concentration of a given industry is one of the major determinants of its ability to influence political and decision-making processes.